Thought Leadership At UC Davis Graduate School Of Management: Professor Greta Hsu On Category Constraints

Byrne: Your use of the word categories is interesting to me. Why do you use it?

Hsu: It is my core interest, the way we divvy up the world. Categories and concepts are this fundamental construct that is informing a lot of the research done by psychologists and sociologists. I like to apply those more micro ideas to thinking about how markets work, how competition works, why certain industries evolve the way they do. So for me, categories are just such a fundamental organizing tool that then shapes and biases how we understand the world around us.

Byrne: Give me the example of another category you’ve studied.

Hsu: I’ve been studying book authors and genres. So with a couple of co-authors, one is at Yale and one is at Arizona State University, we’ve been looking at how authors get constrained to the categories that they start out in. So if an author starts out as a romance writer and they’re trying to bridge into thrillers, we know that can often be unsuccessful. And I think a lot of the reasons we say it might be unsuccessful is that the author doesn’t know how to operate in that new genre. They understood the conventions of one genre, but they didn’t know another one. Another is that book readers are very loyal to their authors as long as they’re doing the theme that they like. But they often get upset when authors try to do new themes.

With books, we like novelty, but we also like familiarity. We like to have that cozy read that comforts us. And so the theme that we identify that we think is different and interesting about the way categories work is that when the book author tries to do something different, it often fails. Stephen King, for example,  wrote The Green Mile, which as a movie was a big hit. He’s known for horror. That’s not a horror story; it’s a prison drama. But the top categorization of it on Goodreads is horror because people just assume that if Stephen King wrote it, it has to be horror. And when we dig into some of the reviews, people will say, “This was such a slow, boring read. I thought it was going to be horror, and I didn’t get any of that.”

It’s not only that people don’t like what you did; they don’t understand that you were trying to do something different because they formed this identity for you, and they are just really confused by what you’re trying to do.

Byrne: That’s interesting, and that work harks back to your dissertation on the movie industry.

Hsu: I’m trying to bridge all these categories, and we can also think about people’s careers. We can think about organizations when they’re trying to come up with services or products. We’re trying to move through this space, but we have an identity that precedes that. So the totality of that really shapes how people come to understand you and what you’re trying to do. It’s useful to think about if I’m trying to make a career transition, I not only have to learn the new skills, but I have to learn how to convince other people, including those who have  already supported me, that I can be successful with this new identity. The people who know me the best are probably going to be the most resistant. We find that readers who already are fans of the authors mis-categorize the most because they form such a strong identity with an author that they simply can’t see that an author is trying to do something different.
Byrne: I wonder if there was a research project that led to the single biggest surprise of your academic career?

Hsu: My work is not super surprising, in part because I’m taking well-worn principles from cognitive science and then applying them. Maybe a moderate level surprise is research that I’ve done with another scholar here, Elizabeth Pontikes and my co-author at Arizona State University, Amanda Sharkey. And we were studying what happened in the aftermath of a mandated pay transparency law in the UK. We were looking at how people responded after firms disclosed their gender-based pay gap. 

In the UK, the government came up with a law that mandated that all companies with 250 or more full-time employees to report the difference between female pay and male pay.The companies reported median pay for women and median pay for men.  

Byrne: Irregardless of their responsibility in the organization?

Hsu: Yes, so it’s very aggregated. The hope, and you can see this in a lot of the justification for why they went to the effort of mandating this, was that we’re going to shame the people who have a big pay gap, and in this way, companies will start to correct it because of the reputational consequences.

Byrne: Did you find that to be the case?

Hsu: We did not. People need to be unhappy and put pressure on organizations before they can change. We didn’t look at the extent of change; we looked at the reputational consequences. And the way we did that is to track them on Glassdoor and reviews over time. We could time the disclosure of a pay gap for each company to a change in Glassdoor responses. 

What we found was a little surprising. One would expect that there’d be a negative hit for having a big disparity. What we found was there was not any sort of negative response. And we would also have expected a positive response to employers who report pay equity. And we found that, but just for a month. So one takeaway was, maybe you need to think more about the way that you design these kinds of transparency mandates. Other countries have demanded more extensive audits. So we’re not just looking at median male pay levels versus female, but we’re actually looking at the same job, same classification. What is the pay gap there? And that’s probably a more meaningful metric.

Byrne: I think that would have definitely have had more impact.

Hsu: Right. So in the UK, what we found is that many companies pointed to pipeline issues to explain the gap. They said that men and women are often in different roles. And so there’s many excuses you could give for that. 

Byrne: So Greta, after all the research you’ve done so far, how has it informed your view of yourself? And as an OB person, I would imagine you’re even more introspective than many others. How has your research changed you as a person?

Hsu: I think in particular, my research that relates to diversity, like the mandated pay gap transparency, or I have other research that touches on issues of diversity. That has really informed the way that I teach my classes and the way that I see and relate to the world around me. One of the most interesting themes that I like to talk about in my classes are the different ways in which implicit bias and diversity manifests itself in organizations. And I can take some of the insights from work that I’ve done. But I think there’s been a wealth of precise studies that really nail down bias in all the ways that organizations hire, evaluate people, assign jobs, and so forth.

That aspect of my training and of my research has really helped me to be able to convey that in a way that many people, some who embrace DEI initiatives less than others can at least still understand. And it helps me to be a better person in the world around me, to really get a sense of what’s going on, to identify situations in which these kinds of dynamics are unfolding.

Byrne: Greta, what’s your most current research interest?

Hsu: Right now I’m working on a project with Elizabeth Pontikes, who is here at Davis, on the venture capital industry. If you’ve been following VC, you may know that there has been a wave of sexual harassment charges against prominent venture capitalists between 2012 and 2017. It let up and right after that we had the Me Too movement and Harvey Weinstein. We’re interested in stigma and stigma by association. So stigma by association is, “I worked with someone and they were later accused of sexual harassment, and now I’m associated with this person. We’re all stigmatized as being this male dominated, unfriendly to women category.” We’re looking at the different kinds of stigma and how that influenced venture capitalists to invest more in female-founded startups as a way to repair their reputations, as well as put female VCs up to be lead partners representing the firm on funding rounds

We’re digging into it and still uncovering our findings. But it’s interesting to think about how there could be a good effect from it. We want to know what’s driving it. Is it just trying to protect your reputation? Is it an industry-wide mea culpa, like we need to start doing it?  One of the interesting things we find is that as soon as the tension starts to taper down, we do see a retraction. So there’s progress in terms of supporting women more.

And maybe once attention leaves, we see less progress. At that point, researchers might stop looking at the issue. We’re saying, no, let’s wait a little bit longer. We know how industries work. We know how the media has attention cycles, So let’s really follow this and see if there is long-lasting change in this industry.

Byrne: Greta, it’s been a pleasure.

Hsu: Thank you.

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